A Renewable Energy Target which rewards all generated MWhs equally has driven the successful uptake of the cheapest technologies for creating MWhs – what a surprise! Building large LNG export plants connected to the East Coast gas system has pulled gas prices up to world parity – what a surprise! Our oldest and most polluting coal plants are being retired by their owners at a time when they are reaching the end of their economic life and the world is looking to limit GHG emissions – another surprise?
So we are being told that maybe the sky is falling; we need new baseload capacity, we need more synchronous generators, we need more gas, we need energy storage, we need more market participants in SA, we need more coal plants, we need to wind back the clock….
In fact, there is substance to many of the points that are being raised, but they come bundled with in many cases a lack of technical understanding and a bunch of hidden and not so hidden agendas.
Let me hypothesise that what we as an Australian society actually ‘need’ from the electricity sector could best be described as: ‘the provision of all the services best provided by electricity in a least cost and resilient manner with GHG emissions and other negative impacts transitioning to zero over the next 3 decades’.
As the title suggests, this article is intended to remind people that Concentrating Solar Thermal (CST) is a mature and available technology that possesses precisely the attributes that people are arguing need to be added or retained in our electricity system as we increasingly remove fossil fired generation.
CST power generation in all commercial plants uses steam turbines connected to synchronous generators. These are the same as encountered in fossil fired power stations, however customised for solar operation to give faster start-ups.
They can provide, as a matter of course, all the ancillary services (ie the various aspects of frequency control and network stability) that are currently provided in the NEM largely by fossil fired generators and about which there has been so much recent controversy.
The CST industry has now adopted as a standard, integrated energy storage using tanks of hot liquid salts. Plants are typically built to provide between 5 and 15 hours of full load operation in a flexible / dispatchable manner.
The cost of CST energy has dropped considerably just as it has with wind and PV although the data is harder to obtain and analyse. The International Energy Agency suggest that the cost of energy from CST with storage will drop below USD100/MWh by about 2025[1] . In 2012 ITP produced a detailed report for the then Australian Solar Institute – a precursor to ARENA on the potential for CST in Australia.
In that study we estimated that an LCOE for a mature system in 2012 would be $250/ MWh[2][i], in 2015 we completed analysis for Abengoa extrapolating from their detailed bottom up cost analysis of a first 30MW Tower plus salt plant for Perenjori WA, to a value for a mature 100MW system, of $170MWh.
In the course of 2016, industry indications are that $150/MWh would be achievable. As with every new technology costs drop with deployment and CST will get considerably lower than that in the long run. These are major cost reductions and as with the other renewables, some published technology cots comparisons continue to report old data in a way that can falsely influence policy makers.
CST systems are most cost effectively built in the range of 50 – 250MW. Renewable energy power stations in the range 50 – 250 MW were once viewed as intimidatingly large, but now that we are contemplating retirements like Hazelwood at 1,600MW, they should rather be viewed through a 2017 lens as small and modular.
CST plants have been operating continuously in California for over 30 years. Global deployment has had an average compound growth of over 30%/year for the last decade. Current total deployment of 4.5GW of generating capacity means it is still in its infancy, but it is way beyond being experimental. In fact that level of accumulated deployment is about where PV was in 2005 or wind in 1995.
Integrated thermal energy storage actually lowers the cost of the generated energy from CST plants. It does this because it removes the need to shed midday excess solar input and so increases annual output from a given solar field size. It also allows the power block to run for a greater period of time and thus be amortised more efficiently. These two factors outweigh the extra (cost effective) investment in the storage subsystem.
Australia has on average the world’s best solar resources and these are greatest inland from the coast. Consequently the best locations to build CST plants are in a distributed fashion around the inland extremities of the electricity transmission and distribution networks.
This brings a number of other positive consequences. CST with storage would help to support the operation of networks and make them more resilient to interruptions such as those experienced in South Australia last September. CST with storage can avoid major investment in network extensions. CST generates a great deal of regional employment during construction (noting that more of the value lies in construction that in the factory manufacture of components).
So far Australia has not constructed a utility scale CST plant. Consequently the technology appears out of sight out of mind in this country.
Spain re-ignited the global CST industry in 2005 and lead global deployment growth until a change of government lead to a policy reversal in 2010. In that time they drove deployment growth of over 2,300GW[3]. Once supply chains are developed in a country, plants can be built in 18 months from ground breaking to grid connection.
At $150/MWh CST can not compete with wind and PV under the current RET. But PV and Wind are variable and CST comes with 5 – 15 hours of storage built in for the price. It would be operated to naturally target the late afternoon early evening high wholesale price periods.
At $150/MWh it starts to look to be on par with hypothetical new build gas generation under future gas prices, but with zero emissions. It also looks more attractive than new build Ultra Super Critical coal plants (but with zero emissions). It is certainly vastly cheaper than a nuclear solution.
Australia could start down the CST track with a competitive international procurement process for the first few plants say 200MW in total from 2 or 3 plants from experienced players.
This could be via initiatives from a combination of the Australian Renewable Energy Agency (ARENA), the Clean Energy Finance Corporation (CEFC) and state based procurements. If we maintained a 30% per year growth rate from such a starting point (consistent with Spanish experience), over 10GW could be achieved by the early 2030’s, providing a good balance to our Wind and PV systems.
But that is just my opinion and maybe I am biased. I suggest the most important thing right now is to also begin immediately to adopt policy and market settings that are technology neutral but fairly reward all the features that we identify we need for a resilient electricity system that also transitions to zero emissions.
There is a good case that the RET should be left unchanged to give certainty to current investors until 2020. Beyond that a new structure is needed, with continued increase in share of Renewable Energy but with certificates earned in proportion to generation multiplied by a scale factor based on a normalised wholesale spot price at the time of generation.
This could be approximated by fixed time of day scale factors for simplicity if needed. Such scale factors should also be employed in state based procurements. Further, we should consider a new market mechanism for zero emissions ancillary services (ie the various aspects of frequency control, network stability and system restart capability) that are currently provided in the NEM largely by fossil fired generators.
If our market and policy settings were adjusted in such a manner, then let the most profitable technologies thrive. I think CST will be one of them, but if other technologies prevail then it would be for the right reasons rather that due to other agendas.
[1] IEA 2014, Technology Roadmap, Solar Thermal Electricity. https://www.iea.org/publications/freepublications/publication/technologyroadmapsolarthermalelectricity_2014edition.pdf
[2] ITP, 2012, Realising the Potential for Concentrating Solar Power in Australia, for The Australian Solar Institute. http://www.itpau.com.au/review-of-the-potential-for-concentrating-solar-power-in-australia-australian-solar-institute-asi/
[3] http://solarpaces.org/csp-technology/csp-projects-around-the-world
Keith Lovegrove is head of Solar Thermal, ITP Energised Group
